re: Technical analysis ... what and why ... crashy
Hi crashy, most analysts factor in Sept 11 as an extroadinary event which has skewed analysis.
The current downside is due to an equally extroadinary event of US financial scandals ...
Technical analysis is good but does not have DIVINE visionary capability in my view ... that I leave to God.
As I reported earlier, an orderly adjustment to US stock valuations has been well underway for the best part of a year (interrupted by Sept11 et al) and in a controlled fashion as part of Greenspan led initiatives.
Given Oz has not experienced that of the US, it is disappointing the way we follow lemming like ... but so be it.
The Rounded Top is as most analysts agree is what you have after any/all other are eliminated ... e.g. strong support for the V shaped bottom ... and so represents revelation in hindsight.
Regina Meani further argues "For these patterns there is no form of reliable measurement ... etc"
Notwithstanding these, it is usual for an upside movement following these formations as the demand side loads up ...
The recent support at Fib(50.0%) was confirmed with accumulation at this level, so a positive call was conventional ...
The hard part for derivatives traders is to plot at which point the market would begin TRENDING again ...
Had the US market been scandal free for the last week ... it might have firmed in my view and we would be knee-deep in LONGS now ... all happy chappies/ettes ...
Not the whole story as the it seems most of corporate america is scurrying to tidy up financials ahead as next reporting and SEC investigations ... further volatility good for traders.
Medium/long term investors have been warned here repeatedly over recent months to set stops for strategic holdings as prudent risk management strategy ... most would have parked the green to protect against possible downside and in anticipation of bargain hunting to come.
Being Bullish doesn't mean foolhardy ...
As you would agree, the main thrust of my analysis is designed for derivatives traders seeking ENTRIES with profit-potential over the near term.
